comScore, Inc. , a leader in measuring the digital world, today released an update of holiday season e-commerce spending covering the first 23 days (November 1 - 23) of the November - December 2007 holiday season. More than $9.3 billion has been spent online during the season-to-date, marking a 17- percent gain versus the corresponding days last year. Online retail spending was strong on both Thanksgiving Day (up 29 percent to $272 million) and "Black Friday" (up 22 percent to $531 million), outpacing the season-to-date growth rate.

Retailers attracted 147 million shoppers over the three-day holiday weekend, up 4.8% from last year, according to a survey conducted by the National Retail Federation. Black Friday's results were especially impressive. About 14.3% of all Americans were out shopping before 4 a.m. on Black Friday, up from 12.4% in 2006, the federation estimates. And ShopperTrak RCT, which tracks the activity at more than 50 million retail outlets, estimates that Black Friday sales rose 8.3% from last year's level. "The Black Friday outpouring should have [retailers] breathing a sigh of relief," says Bill Martin, co-founder of ShopperTrak.

BeallsFlorida.com, the online arm of Beall’s Inc.’s Bealls Department Stores, has converted 52% more shoppers to buyers through its cross-selling merchandising offers with a new automated product recommendation application, the retailer says.

The Intelligent Offer product recommendation application from Coremetrics Inc. is designed to produce cross-selling offers based on an automated analysis of the products browsed and purchased in every visitor shopping session. It replaces a manual system at BeallsFlorida that presented cross-sell items based on “common sense” groupings of products, such as dishes from the same pattern or apparel items from the same line.

Building on its premise that the more consumers know about wine the better, Wine.com has launched a community site designed to generate traffic as wine enthusiasts share information on their personal preferences. “The web is going social, and wine is a social category, so if you’re Wine.com you better have social community features,” says CEO Rich Bergsund.

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The community site is starting out with features such as wish lists, “send to a friend” e-mails of wine reviews and selections, and the personal wine lists of community members. While checking out a member’s wine list, shoppers can click to buy any of the listed wines available on Wine.com.

In this holiday season, you may be getting Gift cards which you may never use or you may use it partially with some amount still remaining in the cards. According to this story on TechCrunch:

Gift cards are expected to be the most widely-given gift this year, with 69 percent of consumers planning to buy them according to one survey. The annual value of gift cards in the U.S. is estimated to reach $100 billion next year, and about 27 percent of people who get a gift card still have not redeemed it one year later. That came to $8 billion in unredeemed money in 2006.

A new startup called Leverage has a solution to this problem. Leverage allows registering all your Gift cards, manage balances and even earn interests on the balances. Among other things you can:

- Receive targeted offers and savings from retailers based on gift cards you have, as well as your loyalty program and calendar info. This is done by something Leverage is calling Transparent Targeting which they describe as follows:

When you log in to your Leverage account, you’ll be invited to view extremely targeted offers and savings from retailers in an inbox specifically made for this purpose. These promotional messages will also feature an explanation as to why the retailer feels their message specifically matches your interests. The targeting only happens with anonymous factors like age, gender, location, personal interests, recent gift card transactions, loyalty program membership, and upcoming gift occasions when sending you these deals. In our next release, while exploring the offers specific to you, you will also have feedback mechanisms which you can use to fine tune all of the future offers to be more and more to your tastes. You will literally be able to turn the “volume” up and down (or even press mute) on a retailer by retailer basis. This is what we call transparent targeting, since the relationship between you and the retailer is more open.

But its (Leverage) main source of income will be through lead generation and data analytics. Most retailers have no idea who ends up getting their gift cards. As more people sign up for Leverage, it can tell those retailers the demographics of the people who hold their cards in an aggregated, anonymous way

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The real opportunity for Leverage, though, will be in ads targeted at people who already hold a cash incentive to shop at a particular store. For most people, a gift card is really just a coupon—53 percent end up spending more than the amount on the card. Leverage will know who holds cards for which retailers and will be able to send targeted messages to them on behalf of those retailers.

LPInformation Magazine November issue has a very informative article on Returns fraud and how Retailers are using Returns Management Systems to minimize the loss due to fraudulent returns. Going by statistics, Fraudulent returns total $9.6 billion a year by one estimate and around $17 billion by another. Measures being adopted by retailers include the following:

Laurie J. Sorensen, vice president of LP and shortage control for Macy’s Northwest, says company policy requires customers to provide proof of purchase in the form of a receipt or a customer return label (CRL) to receive cash or credit back. Otherwise, the system will only allow store credit in the form of an easy exchange card or merchandise-only certificate.A CRL containing the original purchase information “is placed on the merchandise tag and scanned at point of sale,” Sorensen says. “When a customer returns an item without a receipt, we are able to scan the CRL and identify the original tender, which they will receive a refund to.”

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Within its proprietary refund management systems, one major retailer applies an algorithm to specific receipts, creating a unique number associated with that receipt throughout its lifespan. Depending on the payment method the customer chooses, that number can often be tied back to individual customers.

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Mike Keenan, director of LP for Hayward, Calif.-based Mervyns, recently completed the implementation of a returns management system. He was sold on the concept due to his experiences while working for another retailer.“We reduced returns by approximately $20 million,” he says. “It drove the people who did nothing but fraudulent returns right out of our stores.”Returns management systems vary, but basically use either the original sales transaction history (stored in a central database) or statistical modeling to determine whether a return is potentially fraudulent.

Two popular approaches are software-driven analytics programs and item-level product tracking. Both approaches have merits, and depending on your merchandise mix, they can be used independently or in tandem.

An analytic software approach helps retailers maintain flexibility in their returns policies, applying different returns parameters to different customer profiles. The last thing you want your returns policy to do is make legitimate returns difficult for your best customers, which are often the customers who return the most.

Modern returns management software lets store associates authorize returns in real-time by screening for fraud through analysis of customer-specific return behavior. By cross-examining historical returns and customer-specific transaction data, analytical software helps retailers identify specific return patterns. This is a great management strategy that provides retail leadership with vivid insight into the successes and failures of its returns policies. Oracle, Newgistics, and others offer such solutions.

SIF includes three solutions such as 'IBM Digital Video Surveillance (DVS)', an integrated multi-channel retailing solution and 'IBM any place kiosk solution', which would help retailers address issues related to security, channel integration and customer management."With increasing competition, companies are actively looking for IT solutions that will allow them to focus on strategic and innovative business models, IBM India South Asia Director (Solutions) KS Raghunandan said.

Targeting India, a booming economy with tremendous retail industry growth, IBM seems to be doing the right thing. I don't know any other such offerings from other Vendors for Indian Retail Industry. Let me know if you know of any such offering from any other company.

"Our case study shows that a large number of shoppers come to Wal-Mart stores as they offer goods at lowest prices. However, the nearby shops benefit from the crowd that is attracted by Wal-Mart," retail marketing and research company, J C Williams Group's Senior Partner, John Torella said on the sidelines of a retail conference here on Monday.

However, he set a list of dos and don'ts like the nearby retailers should try to stock brands different from those of Wal-Mart or create their own private brands. They should try and become category-dominant, he said.

The nearby stores must try and change their service timings. They could either open or close later than Wal-Mart, he added.

They must try and equal the returns which Wal-Mart offered to its customers, he said, adding they should also keep a customer data base. "They should also unleash marketing strategies come out with ads and flyers," he said.

Adding experience to the business is important, he said.

"The other retailers must make sure that their store environment is exceptional," he said, adding the retailers should be quick to adopt new technologies."

Last week, eStara, the leading provider of proactive conversion solutions for enhancing online sales and support initiatives, announced the findings of a commissioned study conducted by Forrester Consulting to determine the costs, benefits, risks and ROI affiliated with implementing eStara Click to Call technology in a retail environment. The results of the report for the retail portion of the study found:

- Click to Call increased online revenues by more than $2.5 million over three year period

- Retailers experienced payback in a period of between seven and 14 months

- Average conversion rate of Click to Call users was significantly higher than non-users

- Prospects using Click to Call as the primary means of communication were better informed, and asked more detailed questions in comparison to toll-free callers

- Companies that deployed Click to Call reduced their operational costs significantly through a reduction in the average volume of non- transactional calls and improvement in duration of customer calls

Click to call is a very innovative way for a Retailer to connect to its customers.

Half of more than 3,000 retail stores that a wireless security company secretly monitored at major shopping areas in the U.S. and Europe use wireless data systems vulnerable to hacking, the company said Thursday.

The data that stores routinely transmit on wireless networks include credit card and Social Security numbers and other sensitive customer information.

AirDefense Inc., an Atlanta-based maker of security products for wireless data systems, found that about 25 percent of the stores' 4,748 wireless access points were exchanging data with no encryption at all to foil electronic eavesdroppers.

Another 25 percent were using an outdated encryption method called Wireless Equivalent Privacy that is easily cracked by thieves using widely available tools.

The remaining half of the access points — the connections between wireless devices and computer networks — were using newer encryption methods that are considered far harder to crack.

In the generally unyielding area of retail loss prevention, a few U.S. corporations have been highly successful in staunching the pervasive problem of shrinkage—the $42-billion-a-year problem that refuses to go away. This article looks at five of these companies and highlights nine key approaches they have adopted that could potentially save U.S. retailing $18 billion a year.

According to the survey, the average technology influencer spends approximately 8 hours researching a product, versus the average US adult who spends 3.5 hours. Among those technology influencers who have purchased online, they convey that the main benefits of online shopping include easy price comparisons (91 percent), a greater variety of products (86 percent) and lower prices (79 percent). While they report finding retail stores lacking in the variety of products and product information, one of the most compelling aspects of brick and mortar is the ability to fulfill the need for instant gratification. For consumer electronic retailers and manufacturers, the study provides insights into areas where they can improve overall customer satisfaction and experience.

Google UK in partnership with Retail Reserarch companies, trade organisations and media titles, has created Retail Industry Google Gadgets. Among others, the partners include, Retail Bulletin, Retail Week, Comscore, Hitwise and the IAB. The Gadgets are free to use on your iGoogle Homepage and adds on as a tab to iGoogle. The iGoogle Page looks as shown below once you have added the Gadgets.

From Google UK:

Google’s partnership with prominent research companies, trade organisations and media titles brings fresh insights to help the Retail marketing community connect with British shoppers.

Starting this week I have started publishing Weekly Roundup posts. In this post I will try and put together all the interesting posts, news articles, research articles that I come across during the week.

"A NUMBER OF VALUATION METRICS are signaling that retail shares are attractive. Multi-line retailers in the S&P 1500 sport P/Es based on future earnings that are 0.9 times the broader index's, notes Brian Rauscher, director of portfolio strategy at Brown Brothers Harriman. After the dot-com bubble burst in 2000, retailers sold off until their multiples were 0.7 times that of the broader index. Typically, they have peaked when multiples reach 1.2 times that of the S&P 1500 . . .

[Bill Nygren] believes that the shares are more attractive than other stocks, including many in the materials and technology sectors, whose still-lofty prices reflect little risk that the economy will stop growing. Retail stocks would outperform in a recession, he maintains, and could rally strongly if the economy keeps growing."

Investigating some of the latest alternative payment options and integrating them in to your site can help entice that segment of online shoppers not comfortable with traditional methods to make the plunge. The good news is that analysts say the market is maturing to the point where employing alternative payment methods is far simpler to do than it was a few years ago, and is a relatively easy way to boost conversion rates.

The Zazzle Merch Store application lets Facebook users and commercial brands worldwide sell products with their own unique designs from their profiles and Facebook Pages. Each user can design their own products on Zazzle by simply uploading images, text, or designs, making them instantly available for sale in their Merch Store. Designs can be placed upon a wide variety of products including t-shirts, posters, cards, and fashion apparel. For example, users can design and sell any of the edun LIVE customizable fashion blank t-shirts that are socially conscious and ethically sourced available at Zazzle. In addition, through Zazzle's "Name Your Royalty" feature, users can name the price of their products and how much money they make through Zazzle's on-demand retail platform. There are no set-up fees and no inventory to stock. Users can also display Merch Stores they like, and even make money by listing merchandise from their favorite Zazzle artists and brands such as edun LIVE directly on their profiles.

Last month, over 1,900 retailers received traffic from Facebook. Our data shows the site is an increasingly important source of traffic for online retailers like Amazon, ASOS, Ebay and Play.

Facebook attracts an older (a third of its users are aged over 35) and more affluent audience than the other major social networks. Wherever consumers congregate they inevitably talk about brands, and Facebook is no exception. Companies can't have their own page on Facebook, but communities can be, and often are, created around brands.

With 52 Million users and an ever increasing user base of 200,000 users per day, every retailer should be preparing their Facebook strategy. Also, Facebook recently launched Facebook Ads, an ad system that enables people to provide trusted referrals to their friends and helps businesses to spread information through the social graph and communicate with their customers in completely new ways.

Facebook Ads includes three parts: a way for businesses to build pages on Facebook to connect with its audience; an ad system that facilitates the spread of brand messages virally through Facebook Social Ads(TM); and an interface to gather insights into people's activity on Facebook that marketers care about. On other websites, Facebook Beacon provides a way for users to choose to share their activities with their friends on Facebook. Landmark partners are implementing the fullest set of offerings from Facebook Ads.

"We have consistently explored new ways to reach our target audience with a compelling brand experience," said Carol Kruse, vice president, global interactive marketing, The Coca-Cola Company. "With Facebook Ads, our brands can become a part of the way users communicate and interact on Facebook."

The Coca-Cola Company will feature its Sprite brand on a new Facebook Page and will invite users to add an application to their account called "Sprite Sips." People will be able to create, configure and interact with an animated Sprite Sips character. For consumers in the United States, the experience can be enhanced by entering a PIN code found under the cap of every 20 oz. bottle of Sprite to unlock special features and accessories. The Sprite Sips character provides a means for interacting with friends on Facebook. In addition, Sprite will create a new Facebook Page for Sprite Sips and will run a series of Social Ads that leverage Facebook's natural viral communications to spread the application across its user base.

I would assume we should soon see Retailers diverting some dollars from Google/Yahoo/Microsoft ads to Facebook Ads. Social Networking sites like Facebook provides a great platform for businesses to get closer to their customers, so to say, in a more social manner.

Holt Renfrew, one of Canada's premier high-end fashion and lifestyle shopping retailers, has deployed a fingerprint-based biometrics point-of-sale (POS) system that tracks sales associates' transactions at cash registers.Deployed in 2001, in its first three months the technology paid for itself in loss prevention, says Hodkin.And no mistake about it, eliminating shrinkage is a big deal to retailers. The number of dishonest retail employees caught stealing, which runs around 68,994, and the $49.9 million recovered in 2005, was not trivial, according to the recent Retail Theft Survey conducted by Jack L. Hayes International, a consulting firm specializing in loss prevention and inventory-shrinkage control. Their research revealed that the average dishonest retail employee caught stealing cost an employer $724.15 in 2005. This equals almost six times the amount taken by shoplifters, which comes in around $126.87, Hayes International stats showed.

Shrinkage is caused mainly by Employee theft and shoplifting with employee theft accounting for 48.5% of total shrinkage. While the story talked about the direct losses due to employee thefts, there are many indirect costs also associated with Shrinkage. Some of these are, costs to have security guards, security systems like cameras, RFID tags etc.

Current retail measurements are outdated, experts say, and investors now need to take a varied approach to making informed decisions about which retailers will see the fattest profits.

What was once a more cut-and-dried formula has in recent years become far more complicated, as consumers gravitate online and buy gift cards, and traditional shopping days lose their importance.

Same-store, or "comp," sales, which have been a heavily relied upon statistic, measure sales at stores open at least a year. But neither online sales nor the bulk of holiday gift cards shows up in same-store sales data for November and December.

While I never gave it a thought, looks like in view of multiple channels that Retailers have started using, the "Comps" as the article confirms has really become a not so useful metric. There is a scope for some study to factor in the effect of Online Sales to the entire sales of the retailers.

"In general, retail metrics are pretty outdated and comp sales are one of the most outdated," Mulpuru said. "Stores are absolutely being cannibalized by the Web. It's really a naive and outdated metric that has outlived its use."

The stakes are high in accurately predicting U.S. retail health during the holidays, which can contribute as much as 40 percent of yearly profits for retailers. That is especially true this year, when fears over consumer spending are rife amid high gasoline prices, a housing slowdown and a credit crunch.

According to a new IBM Research study titled, "Why Advocacy Matter to Grocers", Grocers are failing to build loyal customers in US. The study analyzes the factors driving customer advocacy and recommends grocers to better differentiate themselves in an increasingly competitive marketplace. From the abstract of the report:

It could be said that the retail food industry and its customers have a lot to be optimistic about. Customers have more choices: more products, more ways to buy groceries and more convenience; and the industry has experienced solid, consistent growth over the past decade. Most of this growth, however, has come at the expense of traditional supermarkets as they watch their customers go to supercenters, wholesale clubs and specialty and boutique food stores. Worse, customers of traditional supermarkets, on average, have a negative attitude about their grocers. According to our new consumer survey about the retail food industry, 73 percent of customers feel either antagonistic or have no loyalty to their store. That leaves only one in four as a customer advocate – a truly loyal customer who would recommend his grocer to others, stick with the store despite competitive offers, and purchase from that store regularly.

This paper discusses the attitudes and behaviors that turn customers into advocates as well as what grocers can do to improve the level of advocacy among their customer populations. The perspectives here are based on our provocative 2007 IBM Institute for Business Value Customer-focused Grocer Study, which provides a new approach to understanding customer attitudes based on input from over 6,000 consumers.

Some important facts from the study include:

Advocacy Pays Off

Advocates are more likely to choose their grocer for large shopping trips – 14 percentmore advocates than antagonists spend more than US$100 per week with their primary grocer. Advocates are also more loyal. Nineteen percent more advocates give the majority of their business to their chosen grocer (see Figure below). Conversely, more than twice as many antagonists (14 percent) as advocates (6 percent) decreased the amount they purchased from their primary grocer over a two-year period.

Advocates vary by Grocery Category

Across grocery categories, supercenters fared the worst, with only one in five customers being advocates (see Figure below). The low score may be the result of the customer experience being sacrificed to focus on lower prices. Interestingly, wholesale and warehouse clubs had much higher advocacy rates despite their similar practices of focusing largely on price..

What that means is that big retailers are not doing well maintaining a loyal customer base.

The Key attributes that drive success is almost same for Advocates and Antagonists

Generally, grocery customers concur on areas that are most important to them. This means the attributes important to advocates are the same ones that are important to apathetics and antagonists. All three groups strongly agree that the essential attribute for a grocer is quality; others include selection, convenience, employees, availability and social responsibility. In fact, the relative ranking of nearly all 15 attributes are the same across the three groups.

The study ends with identifying the factors that allow Grocers to be more customer-focused. These includes:

Understand customer needs and expectations from the outside in: Place high priority on having deep insights into shopping preferences and needs to create a satisfying shopping experience for core customer segments across all channels and shopping venues.

Use customer insights to drive business operations: Drive these insights across the business to optimize all key decision making, including buying merchandise, pricing and promoting products and services, serving customers, marketing and communicating to customers.

Break traditional design constraints: Design processes based on how customers interact with the grocer, not how the grocer wishes to interact with customers. Incorporate relationship and communication skills in the learning and development of staff and leaders.

Adopt a transformational change mindset: Embrace the notion of becoming customerfocused. Measure what’s important to the customer and share results companywide, restructuring as needed to align management and incentives to embrace customer knowledge and reward advocacy.

Prioritize investments based on what really counts: Prioritize investments based on criteria that define a successful shopping experience for the company’s best customers.

ComputerWeekly has an article with focus on careers in Retail IT. Retailers are moving from Legacy systems to newer technologies with Multi-channel Retailing taking prominence.

The days when retail relied exclusively on legacy IT are gone, and the sector offers opportunities to spearhead roll-outs of cutting-edge technology

Retail has traditionally been a relatively unattractive sector for IT professionals, with low investment in technology.

"Some retailers are still running AS/400-based systems developed 15 years ago," says Iain Mc­Keand, head of the regional CIO practice at Harvey Nash, who spends much of his time recruiting for senior roles in the retail sector.

But things are changing. "Retailers are realising they need to raise spending on IT from less than 1% of turnover to between 1% and 2%.

"Those legacy systems may have been robust in the past, but they cannot cope with supporting the move to multiple channels," says McKeand.

Some new facts from Retail Recruitment side of view:

1. Whereas Vadher has used open source systems, Jane Binner, an associate director with recruiters Computer People, says that the retail sector runs mainly on Microsoft technologies such as ASP, C# and in some cases Visual Basic.

2. Breaking into retail can be tricky because retailers prefer to hire IT staff with retail experience.

"They can identify with the issues customers and store managers have. They understand what competitors are doing, and where the sector as a whole is going in the next six months," Binner says.

3. ...at many retailers, new recruits spend some of their induction period working in stores, either behind the counter or in the stockroom. Some retailers go further and will ask IT candidates, particularly for senior roles, to work in store as part of the selection process, with the evaluation of the store manager performing part of the assessment.

"That reflects the importance placed in good interpersonal and stakeholder skills," McKeand says.

4. Hours can also be long. "Retail inevitably demands working outside normal nine-to-five hours, especially if the retailer is a seven-day operation," McKeand says.

Vadher says that there are often extra seasonal pressures. "Christmas is the hardest part of the year and is quite stressful. We get a lot of stick from the rest of the business at any time of year when there are IT problems," he says.

5. Salaries in the retail sector also tend to be lower than some equally high pressure sectors such as finance, although McKeand says salaries are still attractive.

While Shop.Org had their Annual Summit in US, some of the top Indian Retailers & professionals gathered in Mumbai for India Retail Foru...

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The information in this weblog is provided "AS IS" with no warranties, and confers no rights. This weblog does not represent the thoughts, intentions, plans or strategies of my employer. It is solely my opinion. Inappropriate comments will be deleted at the authors discretion.